Question

The spoilage rate on a shipment of wheat is expected to be 20%. It was purchased at a cost of $5.35 per bushel. What should the selling price per bushel be to achieve a markup of 6% based on selling price? (Round your answer to the nearest cent)

Answer 1

Answer:

$7.09

Step-by-step explanation:

Let wheat shipment be x bushels

Per bushel cost = 5.35

So x bushels cost = 5.35x

Achieving markup of 6% means 1.06 * 5.35x =5.671x

20% spoiled means 80% of x stays, so 0.8x will need to be sold at 5.671x

Selling price should be 5.671x/0.8x = $7.09

So that's 7 dollars and 9 cents

Answer 2

Answer: Selling price would be $7.09.

Step-by-step explanation:

Since we have given that

Cost per bushel = $5.35

Spoilage rate = 20%

Mark up rate = 6%

Amount of mark up is given by

$0.06\times 5.35\\\\=\ 0.321$

Amount after mark up is given by

$5.35+$0.321

=$5.671

According to question, we get that

$\dfrac{100-20}{100}\times x=5.671\\\\\dfrac{80}{100}\times x=5.671\\\\0.8x=5.671\\\\x=\dfrac{5.671}{0.8}\\\\x=\ 7.09$

Hence, selling price would be $7.09.